Reko Diq mines: Balochistan refuses out-of-court settlement

Balochistan govt asks SC to finish its deliberations and rule on the matter.

ISLAMABAD:

The Balochistan government has refused to pursue an out-of-court settlement with the Tethyan Copper Company (TCC) on the dispute over the Reko Diq mines and has asked the Supreme Court to finish its deliberations and rule on the matter.

Balochistan Advocate-General Amanullah Kinrani made the argument in front of a three-member Supreme Court bench hearing the case. He was responding to the suggestion by TCC counsel Fakhruddin G Ebrahim that  the case be settled out of court.

Ebrahim argued that the ruling of the Balochistan High Court, seen by some observers as favourable to the TCC, remains in effect while any settlement between Quetta and the company is being worked out.

Kinrani alleged that the TCC had not paid any fees to the Balochistan government. Justice Sair Ali, one of the members of the bench, pointed out that the non-payment of fees was a failure on the part of the provincial government to collect it. Chief Justice Iftikhar Muhammad Chaudhry, leading the bench, also pointed out that mineral rights were a provincial subject.

Kinrani then tried to argue that the contract to the TCC was awarded without the ‘permission’ of the Balochistan Chief Minister. Khalid Anwar, another lawyer for the TCC, pointed out that mining contracts are always awarded either by the president or the governor of the province, not the chief minister.

Anwar said that both provincial and federal governments were consulted before the mining contract was awarded to the Islamabad-based Tethyan Copper Company. “Verbal objections carry no weight,” he said. The TCC lawyers argued that the company had completed its exploration of the site according to their agreement with the Balochistan government and, according to section 48 of the Balochistan Mineral Rules 2002, was entitled to begin mining.

The Tethyan Copper Company is offering the Balochistan government a 25 per cent equity stake in the company in addition to a royalty fee on its revenues.

According to the company’s estimates, the federal and provincial government will put in none of the investment while being entitled to 52 per cent of the project’s cash flows.

The company’s sponsors, Barrick Gold Corporation of Canada and Antofagasta of Chile, are willing to invest $3.3 billion in Pakistan to complete the project.

The next hearing of the case will be held on Thursday (today).

Published in The Express Tribune, April 7^th, 2011.